|
Mac partners battle on Positive remarks counter October gloom based on fiscal rejection speculation Gary Park For Petroleum News
The smallest interest partner in the Mackenzie Gas Project has suddenly become its biggest booster at a time when hopes are waning.
ExxonMobil, whose wholly owned Canadian unit has a 5.2 percent stake, believes natural gas demand will rise by 50 percent over the next 20 years, creating enough demand to move the C$16.2 billion Mackenzie project forward.
Andrew Swiger, senior vice president and a member of ExxonMobil’s management committee, told a Calgary audience there is “room for a lot of gas in North America” based on estimates that demand will grow by 1.8 percent a year to 2030.
Regardless of the expected surge in shale gas supply, ExxonMobil sees an “expanding gas framework that provides plenty of support for projects like the Mackenzie project,” Swiger said.
“We along with other proponents of the project continue to work diligently with the communities, the regulators and the (Canadian) government to progress this project,” he said.
“We hope we will see an outcome to that in the not too distant future.”
The remarks were in sharp contrast to the gloom that spread over the project in late October amid speculation that a Canadian government cabinet committee had rejected a proposed fiscal plan.
March ‘dismayed’ Bruce March, chief executive officer of Imperial Oil (69.6 percent owned by ExxonMobil) and lead partner in the MGP, told reporters Nov. 3 he was “dismayed” to see that coverage, “when in fact we’ve been told that nothing’s different” in the status of negotiations between the consortium and the Canadian government.
He noted that the government is evaluating a package of fiscal measures to improve the MGP’s economics and that analysis can only occur in private.
“We’re still trying to achieve a fiscal framework along the lines that the government’s laid out; we’re still trying to progress and finish aboriginal access agreements and we’re still waiting for the Joint Review Panel and those findings,” he said.
March echoed Swiger’s view that gas is “going to play an absolutely critical and significant role in the world meeting all climate change goals, not only in North America but around the world.”
“So we take a long-term approach and view. We see natural gas demand going up some 40 percent in the next 25 years,” March said.
ExxonMobil’s direct participation in the Mackenzie venture stems from its 25 percent share of the estimated 1.8 trillion cubic feet of reserves in Parsons Lake, with ConocoPhillips Canada holding the remaining 75 percent.
However, Imperial Oil is the lead partner, with 100 percent of the 3 tcf Taglu field and Shell Canada has a 100 percent interest in the 1 tcf Niglintgak field.
The ownership breakdown gives Imperial 34.4 percent, the Aboriginal Pipeline Group (through its option to take a one-third equity position in the Mackenzie pipeline) 33.3 percent, ConocoPhillips 15.7 percent, Shell Canada 11.4 percent and ExxonMobil Canada 5.2 percent.
MGM downplays reports Separately, Henry Sykes, president of junior Arctic explorer MGM Energy, has downplayed media reports suggesting fiscal discussions on the Mackenzie pipeline with the Canadian government are in trouble.
“We have had no communication with the government of Canada which would confirm the stories,” he said in a statement.
“On the contrary, we are continuing to work with all parties, including the government … on the pipeline project.”
MGM said it is encouraged that the regulatory process is nearing conclusion, with the Joint Review Panel on environmental and socioeconomic issues due to report in December and the National Energy Board setting a timetable for completion of its report by the third quarter of 2010.
The statement accompanied MGM’s disclosure of a C$4.5 million net loss for the third quarter, raising its nine-month net losses to C$47.5 million.
It attributed the latest loss primarily to additional dry hole costs on its North Ellice J-17 and Ellice A-25 wells drilled during last winter.
But the company said it has a positive working capital of C$13.3 million, including restricted cash of C$10 million.
MGM reported in late October that it had completed a nonbrokered private placement financing of 19.63 million common shares at an issue price of 12.5 cents per share and 6.67 million flow-through common shares at 15 cents per share, yielding gross proceeds of C$3.45 million.
It said the money will be used to fund C$1 million of seismic work this winter to further delineate oil prospects in the central Mackenzie Valley and for general corporate purposes.
But MGM has previously decided not to drill on its Inuvialuit concession lands in the Mackenzie Delta during the winter season because of pipeline uncertainties.
Instead its focus will be on efforts to better understand the geological potential of existing discoveries and lands and monitoring the regulatory process.
Because of its drilling decision the company is obliged to make a C$10 million payment to the Inuvialuit Regional Corp. in August 2010.
| 